NEC (6701) AI Stock Analysis

• Market Cap: $6.15T
• Dividend Yield: 0.61%
• Average Volume (3M): 4.36M
• Price to Earnings (P/E): 30.1
• Beta (1Y): 1.04
• Revenue Growth: -0.35%
• EPS Growth: 32.66%
• Country: JP
• Employees: 105,276
• Sector: Technology
• Sector Strength: 89
• Industry: Information Technology Services
• EPS (TTM): 14.49
• Shares Outstanding: 1,364,249,300
• 10 Day Avg. Volume: 4,361,860
• 30 Day Avg. Volume: 4,362,086
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 1.66
• Enterprise Value/Gross Profit: 5.36
• Enterprise Value/Ebitda: 13.83
• 1Y Price Target: $4,365.24
• Price Target Upside: -4.69% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 79 Outperform
• Price Target: ¥4,969.00 ▲(8.49% Upside)

NEC's overall stock score reflects its robust financial performance and positive earnings call sentiment, which are significant strengths. While technical analysis indicates bullish momentum, valuation concerns with a high P/E ratio and modest dividend yield moderate the overall score. Challenges in specific business segments were noted but are outweighed by the company's strategic achievements and growth prospects.

NEC Business Overview & Revenue Model

Company Description

NEC Corporation (6701) is a Japanese multinational information technology and electronics company headquartered in Tokyo, Japan. The company operates in various sectors, including IT services, network solutions, and electronic devices. NEC provides a wide range of products and services, such as cloud computing, artificial intelligence, telecommunications equipment, and software solutions, catering to both corporate and government clients worldwide.

How the Company Makes Money

NEC Corporation generates revenue through a diverse array of products and services across its core business segments. The company earns income from its IT services, which include systems integration, cloud services, and cybersecurity solutions, aimed at improving business operations for enterprises and governmental organizations. Additionally, NEC's network solutions segment provides telecommunications infrastructure, including mobile and fixed-line networks, which are essential for global connectivity. The electronic devices business contributes to revenue through the sale of semiconductors and related technologies. Significant partnerships with businesses and governments enhance NEC's ability to deliver comprehensive technological solutions, thereby supporting its earnings. The company's focus on innovation and R&D is also a critical factor in maintaining its competitive edge and driving financial performance.

NEC Financial Statement Overview

Summary

NEC has demonstrated strong financial performance with solid profitability and efficient cost management, reflected in a high net profit margin and strong cash flow generation. The balance sheet is stable, but increasing debt and capital expenditures require cautious monitoring.

Income Statement

NEC has shown robust performance with improving profitability metrics. The gross profit margin stands at 30.99% for the latest year, indicating efficient cost management. The net profit margin has increased to 5.12%, reflecting a solid bottom line. Revenue growth has been positive over the years, although there was a slight dip in the latest year. Both EBIT and EBITDA margins indicate strong operational efficiency, with an EBIT margin of 8.27% and an EBITDA margin of 12.41%.

Balance Sheet

The balance sheet of NEC shows a healthy equity base with a debt-to-equity ratio of 0.34, suggesting moderate leverage. The return on equity is 8.97%, demonstrating effective use of equity financing. With an equity ratio of 45.23%, the company maintains a balanced capital structure. However, the increase in total debt over the years warrants cautious monitoring.

Cash Flow

NEC's cash flow statement reflects strong cash generation capabilities. The free cash flow has grown consistently, with a free cash flow to net income ratio of 1.24, highlighting robust cash earnings relative to net income. The operating cash flow to net income ratio of 1.97 further underscores healthy cash conversion from operations. The trajectory of free cash flow growth is positive, though capital expenditures have increased, which may impact future free cash flow if not managed.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.42T	3.48T	3.31T	3.01T	2.99T
Gross Profit	1.06T	1.01T	958.25B	886.41B	861.18B
EBITDA	424.89B	375.71B	353.75B	313.06B	331.06B
Net Income	175.18B	149.52B	114.50B	141.28B	149.61B
Balance Sheet
Total Assets	4.32T	4.23T	3.98T	3.76T	3.67T
Cash, Cash Equivalents and Short-Term Investments	584.62B	476.49B	435.24B	448.33B	532.92B
Total Debt	666.36B	548.64B	608.48B	597.38B	702.86B
Total Liabilities	2.24T	2.14T	2.07T	1.98T	2.11T
Stockholders Equity	1.95T	1.92T	1.62T	1.51T	1.31T
Cash Flow
Free Cash Flow	218.00B	171.46B	74.41B	76.41B	203.97B
Operating Cash Flow	344.41B	271.23B	152.13B	147.52B	274.91B
Investing Cash Flow	-242.17B	-76.02B	-49.59B	-63.38B	-122.49B
Financing Cash Flow	7.03B	-155.51B	-122.79B	-189.62B	1.39B

NEC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4580.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6701, the sentiment is Positive. The current price of 4580 is above the 20-day moving average (MA) of 4344.45, above the 50-day MA of 4135.62, and above the 200-day MA of 3250.41, indicating a bullish trend. The MACD of 161.65 indicates Negative momentum. The RSI at 65.15 is Neutral, neither overbought nor oversold. The STOCH value of 57.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6701.

NEC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6701	79 Outperform	$6.15T	30.15	10.52%	0.61%	-0.35%	32.66%
9719	74 Outperform	¥1.43T	29.04		1.55%	33.00%	21.00%
6702	70 Outperform	$6.41T	16.63	11.82%	0.80%	-8.36%	45.42%
4307	69 Neutral	¥3.43T	35.45	23.37%	1.04%	3.28%	16.48%
Sector *	68 Neutral	¥242.18B	15.62	6.62%	2.44%	9.08%	2.46%
3626	67 Neutral	¥1.15T	22.11		1.39%	4.39%	7.80%
9613	65 Neutral	$5.55T	39.02	7.93%	0.63%	3.73%	11.64%

NEC Corporate Events

NEC Restructures Fire and Disaster Prevention Business

NEC Corporation is restructuring its fire and disaster prevention business through a series of corporate splits involving its wholly-owned subsidiaries. This strategic move aims to strengthen NEC’s business foundation in the digital transformation and social infrastructure domains by transferring operations to NEC Networks & System Integration Corporation. The reorganization is part of NEC’s broader plan to streamline its operations and enhance its market positioning in domestic regions.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen3500.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Reports Strong Financial Recovery in Q2 2025

NEC Corporation reported a significant improvement in its financial performance for the three-month period ending June 30, 2025, with a notable increase in revenue and operating profit compared to the previous year. The company’s strategic initiatives, including a share split, have positively impacted its financial stability and market positioning, reflecting a strong recovery and growth trajectory.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen2340.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Announces Segment Revisions for Enhanced Financial Clarity

NEC Corporation has announced a revision of its organizational segments, effective from April 1, 2025. This change will be reflected in the company’s consolidated financial results starting from the first quarter of the fiscal year ending March 31, 2026. The reorganization aims to streamline operations and potentially improve financial transparency and performance, impacting stakeholders by clarifying the contribution of acquired companies to NEC’s overall earnings.

The most recent analyst rating on (JP:6701) stock is a Buy with a Yen3120.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Records Gains from Retirement Benefit Trust Assets

NEC Corporation announced the recognition of gains from the return of overfunded retirement benefit trust assets, amounting to 140,000 million yen, with a recorded gain of 52,700 million yen as extraordinary income for the fiscal year ending March 31, 2026. This financial maneuver is expected to have no impact on NEC’s consolidated financial results, as they adhere to International Financial Reporting Standards (IFRS), but it highlights the company’s strategic management of its financial resources.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen11700.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Announces Corporate Restructuring to Enhance Competitiveness

NEC Corporation has announced a corporate restructuring involving a simplified absorption-type split, transferring shares of its subsidiaries, NEC Nexsolutions, Ltd. and NEC Networks & System Integration Corporation, to NESIC Holdings, Ltd., a wholly-owned subsidiary. This strategic move aims to enhance competitiveness, improve management efficiency, and facilitate rapid decision-making, aligning with NEC’s broader business reorganization strategy to strengthen its market position and operational capabilities.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen11700.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Announces Increased Year-End Dividend and Share Split

NEC Corporation announced a decision by its Board of Directors to distribute dividends to shareholders, with a year-end dividend of 70 yen per share, totaling 18,683 million yen. This decision reflects an increase from the previous year’s dividend, highlighting NEC’s financial stability and commitment to rewarding its shareholders. The announcement also noted a share split effective April 1, 2025, which impacts the calculation of dividends for fiscal years 2024 and 2025. This move is likely to enhance NEC’s market position and shareholder value, while also adapting to market conditions and strategic growth plans.